Subsidised kerosene for BPL families only

TNNJun 6, 2006, 01.28am IST

NEW DELHI: The government has decided to initiate a pilot project in Bihar where subsidised kerosene will be targeted at BPL families. This is in line with the Rangarajan committee's recommendation to restrict sale of subsidised kerosene to below poverty line (BPL) families.

While prices of kerosene has been left unchanged since April '02, LPG prices were last revised in November '04. The pilot project is being implemented in Bihar since the government believes that if the pilot is successful in the least computerised Indian state, it is likely to yield results in other states as well.

Going by the Rangarajan committee's recommendation, there will be a system of a single price at the point of retail sale for all consumers with the subsidy being passed on to BPL consumers through alternate mechanisms. Speaking to reporters, union petroleum minister Murli Deora said: "We are starting a pilot project to see if subsidies can be directed to the targeted clients.

If we can make a success of this in Bihar, we will carry it out in other states as well." The government has decided to pass on the subsidy through debit cards. These smart cards are expected to aid disbursement of subsidy while simultaneously enabling maintenance of a data bank on the beneficiaries, their consumption patterns and transaction histories.

It is believed that restricting the use of subsidised kerosene to BPL families will reduce the quantity of PDS kerosene through the subsidised route by around 40% from the present level. At current international prices, oil marketing companies are suffering losses of Rs 17.16 per litre of kerosene sold and Rs 114.45 per LPG cylinder sold.

Prices of kerosene and LPG are highly subsidised and have been kept at artificially lowered prices despite a 60% jump in the price of crude oil.